Hindujas eye acquisitions in Europe, South America

Chennai, Oct 5 (IANS) The London-based Hindujas are eyeing takeover of technology firms and foundries in Europe and South America and plan to invest Rs.37 billion ($800 million) to make their automotive and foundry businesses a Rs.300 billion ($6.5 billion) enterprise.The group’s Chennai-based truck and bus manufacturer Ashok Leyland is also setting up an integrated chassis and bus assembly unit at Ras Al Khaimah in the UAE to offer modern vehicles at highly competitive prices in the region, a member of the family said.

“We will grow our automotive business organically or inorganically. The idea is to take our group’s automotive business global,” Dheeraj G. Hinduja, co-chairman of Ashok Leyland, told IANS.

“Funds for realising that is not a constraint,” Hinduja said, adding: “The acquisitions will be routed through Ashok Leyland, Hinduja Foundries or through our group’s automotive holding company, Hinduja Automotive.”

The 37-year-old industrialist said some technology companies and foundries had already been identified in Europe and South America for acquisition. At present, this business unit is a Rs.80-billion enterprise.

“For foundries, we are basically interested in taking over companies that make engine cylinder blocks and heads. But it will be premature to give further details on these plans as yet.”

Hinduja also ruled out the group’s entry into the passenger car segment. “It is too crowded at the moment,” he said, adding acquisitions in automotive and foundry businesses would be made to get hold of some unique products, technology and customers.

The group’s flagship company in India, Ashok Leyland, is also on an expansion spree, having inked joint ventures with Nissan for light commercial vehicles, engines and power trains, as also John Deere for earthmoving equipment.

The company also has similar tie-ups with Alteams for high-pressure die-castings, Continental AG for automotive electronics and software, and JBM Auto for sheet metal components. It also acquired the Prague-based truck maker Avia in 2006.

“Lots of changes happened in the past few years. We felt Ashok Leyland’s inherent strength wasn’t exploited properly to become a global player. We then decided to expand on our own in areas where we have strength and go for tie-ups in others.”

Ashok Leyland, he said, was also in the process of increasing output from 84,000 units to 100,000 units, even as he announced the introduction of a new, full-range truck platform in 2010.

“With all our plans we will offer sophisticated products at Indian prices.”